When I was first practicing law in the 1980's, the term
"estate planning" conjured up visions of lawyers in expensive suits
and large offices sitting down with the DuPonts and the Pews and figuring out
ways to keep their fortunes intact through the next ten generations. Estate planning meant avoiding taxes through
intricate schemes and legal gymnastics that most of the people I knew didn't
need. Today, the federal estate tax only
applies to estates over $5,340,000 [as of 2014]. Only the wealthiest 2% of the population
needs to be concerned with planning for federal taxes. But I have lived more life since then, I have
seen loved ones become ill and pass away, and I have gone to their homes and
sorted through their things, and discovered more about what estate planning
really means. It is about planning,
about organizing, about confronting your own mortality, and most of all about
having "the Conversation".
People shy away from thinking and talking about the various
events of life that can change their day to day routine so quickly: about accidents, illness and disease, aging
and death. They are events that we
cannot control, but they are events that we can plan for. Having the conversation starts with talking
to yourself: what is your contingency
plan if you are hospitalized, if you have a lingering illness, if you cannot
make your wishes known to your doctors and loved ones. Who do you want to make those decisions when
you can’t? The law in its infinite
wisdom provides the method for all of the people who do not plan for these
events. If you cannot take care of
yourself, the law permits a guardian to be appointed, in a process involving
lawyers, a judge, hearings, time and expense.
If you have not made your wishes known through a living will, then the
law provides the same process: lawyers,
a judge, hearings, perhaps Congressional hearings and political battles as well
(remember Terri Schiavo?), all to determine what you might have decided if
you had been competent to decide the issue of your own life and death, and if
you had taken the time to let your loved ones know your wishes. A little thoughtful planning, a discussion
with your family a little expense, and you can provide for these situations,
you can decide the issues that only you should really decide, you can document
them, and then you have done all you can.
You have bought a relatively inexpensive form of insurance for the
situation. But most important, you have
had the conversation, first with yourself, and then with your loved ones. You have made a plan.
Estate planning today means having a durable financial power
of attorney that designates one or more trusted loved ones to take charge of
your financial affairs when you are unable to do so. It means having a living will - also called a
medical directive - that expresses what you would want done if you are in an end-stage
medical condition, and selecting the person or people who you want making those
decisions when you can't. It means
having a will that provides for your loved ones and appoints the person you
want to handle your affairs. It means
considering making gifts while you can enjoy the giving; checking to make sure
your insurance beneficiary designations are up to date; putting your records
together in one safe place, writing notes to explain your affairs, list your
various passwords, and even attending to your genealogy, and putting the names
of the people on the back of the old family pictures. It means telling your loved ones that you
love them, writing them letters to be opened when you are gone, and showing
them how much you love them by the thoughtful way in which you have prepared
for that day. By having the
conversation, first with yourself, and then with your loved ones, and then
putting an estate plan in place, you do not ward off the events of life, but
you have done everything in your power to prepare for them. So start today, in the morning over coffee or
tea, and have the conversation.
©2014 Douglas P. Humes
Posts
